smokingFaced with increasing healthcare costs and wanting to be a good role model, Gus Grohcer of Canned Foods 4 Less advises all prospective employees that he does not hire smokers and tests for nicotine, making all job offers “contingent upon passing a pre-hire drug screen including nicotine test.” During the ninety day probationary period, Chimm Nee Stax volunteered a urine sample for testing. When the test returned positive, Gus Grohcer advised Chimm Nee that he was canned. Can Canned Foods 4 Less butt into the lives of its smoker-employees like Stax? Does Chimm Nee Stax have a claim for discrimination, for wrongful termination or for violation of ERISA by interfering with his rights?

Discriminate Against Smokers in Texas? Yes, Gus Grohcer and Canned Foods 4 Less can refuse to hire smokers despite any threat or complaint of Chimm Nee Stax. Smokers are not a protected class under federal law, nor is being short, being overweight or being ugly. Refusing to hire smokers is not illegal in Texas and some 19 other states where it is perfectly legal for an employer to ask if you are a smoker and let that be determinative of hiring.

Eighteen states prohibit discrimination against tobacco users; and eight protect an employee’s right to use in the workplace an otherwise lawful consumable product. Four states prohibit discriminating against employees engaged in lawful activities outside work, including smoking tobacco in California, Colorado, New York and North Dakota, where it is illegal to not hire you simply because you smoke. What about a marijuana smoking Colorado employee Chimm Nee Stax might ask? A case is pending before the Colorado Supreme Court. Even in those some 30 states that prohibit discrimination, if being a nonsmoker is an important part of a specific job’s qualifications, such as an antismoking advocacy group like the American Lung Association, smokers can be rejected.

Relationship Between Smokers and Healthcare Costs? When the smoke clears, Gus Grohcer and Canned Foods 4 Less are not missing the mark on reducing labor costs. The Center for Disease Control reports that smoking is the leading preventable cause of death, disease and disability in the United States, is responsible for more than 480,000 deaths per year, costs more than $289 billion a year, including at least $133 billion in direct medical care for adults, and costs more than $156 billion in lost productivity. Eliminating smokers will increase the bottom line because tobacco users’ annual health care costs are $3,000 to $4,000 greater than non-smokers.

And Gus is not the only one. Estimates are that 61% of large employers are surcharging tobacco users. Hospitals like Baylor Health Care System lead the way with 21% of all hospitals having bans this year (one-third are expected to have bans next year) by imposing a health insurance surcharge on smoking employees of greater than a thousand dollars annually. Those smokers seeking health insurance through the exchanges are seeing insurance rates of approximately $4,000 per year above those for a comparable nonsmoker.

Socioeconomic Discrimination? Since smoking is unevenly distributed, some argue that by refusing to hire Chimm Nee Stax, Gus and others like him are unethical because they are cherry-picking ‘low-risk’ employees and denying smokers employment, risking hurting vulnerable groups. “More than 36% of Americans living below the federal poverty line are smokers, as compared with 22.5% of those with incomes above that level.” And since about 45% of unemployed people smoke, no-hire policies would create a “double-whammy” among this group.

Tilting the Scales in Your Favor. The uncertainty of the costs and regulatory implications of Obamacare undoubtedly encourages every company, including Gus Grohcer and Canned Foods 4 Less to promote the health and well being of its employees. Whether the rationale is as fickle as physical appearance or as pragmatic as healthcare costs and productivity, a non-smoking, fit employee has fewer unplanned, missed work days and is likely to be less burdensome upon the company’s healthcare program. The result? A better, cheaper insurance plan for all employees of Canned Foods 4 Less. Our Gray Reed employment experts Ruth Ann Daniels and Michael Kelsheimer[1] advise that companies are becoming more mindful of excluding job applicants who smoke and are obese. Some companies are even modifying their Employee Handbooks to motivate the reduction and even elimination bad health habits and to promote healthier habits, including health club memberships and the like.

* Thanks to one of our faithful readers Mary Ann Markowitz who recommended this April Tilting article. We welcome recommendations for any legal or business issue affecting your closely held company.

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